Alabama's tax structure for vehicles is multi-layered, consisting of state sales tax and localized property taxes.
Whether buying from a dealership or a private seller, you must have the following documents ready to ensure a smooth transaction and legal operation of the vehicle:
: You must carry liability insurance with minimum coverage of 25/50/25 ($25,000 for bodily injury per person, $50,000 per accident, and $25,000 for property damage).
: Alabama law requires you to obtain a license plate and register your vehicle within 20 calendar days of the purchase date to avoid penalties.
: Alabama requires immediate coverage for used car purchases; there is no grace period for driving without insurance.
: This must include the purchase price, date, and signatures of both parties.
: The standard state sales tax for automotive vehicles is 2% of the purchase price.